Every successful agent representing buyers has had to deal with the frustration of buyers just “sitting on the fence.” After several years of having to deal with:
– Prices continuing to decline
– Overall real estate market uncertainty
– Personal employment issues
– Economic woes
Buyers have officially developed a “bad habit” of doing nothing. Even in markets where uncertainty has diminished, most buyers continue to do nothing. So, what is missing? Buyers in virtually every industry refuse to buy unless there is a clear and present risk of losing something valuable to them if they don’t buy. Remember, “the risk of loss is far greater than the ecstasy from gain.”
The closes that have been developed create urgency by showing the buyer what they risk if they don’t buy now! By identifying a “window of opportunity,” the risk of loss can be magnified. Each window effectively places a short time-line on the how soon the buyer must make a decision before the buyer suffers from delaying a purchase. The window of opportunity should be applied to other closes to heighten the sense of urgency that goes along with each of the other closes.
Here are some great examples:
For Buyers
– The Interest Rate Close– When rates go up the buyer may only qualify for a smaller home, thus having to settle for “less house” for the rest of their lives. Very Powerful. By showing the buyer that the window of opportunity has already begun to close, when the rates increase even slightly, a buyer can identify with the loss immediately. As interest rates go up, the window of opportunity closes and the buyer qualifies for less, or has to pay more. Either outcome is undesirable and creates pressure to make a decision now.
– The Recaptured Equity Close– This theory shows the buyer how they may benefit from a price over-correction. If prices in a healthy market increase 5% per year, and this has not happened for several years, the buyer has an opportunity to possibly receive or recapture equity that the seller lost. The window begins to close once appreciation of greater than 5% is realized in any given year. When we see this the window has already begun to close with the buyer losing the opportunity to recapture depreciation.
– The Bad News Is Good News Close– With recent publicity about deficit spending, Europe’s economic woes, unemployment, and a slowing recovery, the buyer is in an ideal position to get the best possible price from a seller. Once the headlines turn positive the window of opportunity from bad publicity closes and the seller is no longer willing to negotiate the best price.
For Sellers
– The Pent-Up Seller Demand Close– There is great concern about the number of sellers that have decided to wait for the market to improve before they put their homes on the market. There is a window of opportunity that exists for the seller to exploit less competition. This window will close once the recovery is in place and other sellers jump back into the market.
– The Tax Forgiveness Close– There is still time for many sellers who are underwater to cut their losses by short-selling their homes. The IRS has agreed to waive the amount that a bank forgives in a short-sale by not including this amount as income through 12/31/12. If the tax forgiveness is not extended after 12/31, the seller loses the window of opportunity they had to exploit this loophole. Given the amount of time it takes to get a short-sale through, this window is very small.
Notice how using the window of opportunity magnifies the urgency that is created in each of the above closes. Use several closes to create multiple windows that give you lots of reasons to stay in contact with buyers to give them updates.